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Wednesday, March 3, 2010

More on the "iPhone Effect" in South Korea's Telecoms Market

As time goes on, it is increasingly apparent that the introduction of Apple's iPhone provided a shocking jolt to South Korea's communications market, sometimes referred to in the press here as the "iPhone effect." This has been the subject of previous posts here.
The full awareness of the transformation taking place in Korea's mobile market has still not sunk in at SK Telecom, which recently announced that it would not allow use of VOIP services such as Skype on its mobile phones. In an earlier post I suggested that this would simply drive SK Telecom users to KT, which allows such services on its phones, including the Apple iPhone. Today's Joongang Daily notes a report by Atlas Research that shows 46 percent of iPhone users switched to KT from one of the other two mobile service providers, and more than half of them from SKT. This trend of customers switching from SKT and LG Telecom to KT is unlikely to stop until those companies offer Android-based phone services, with emphasis on the apps and content, that rival those of the KT's iPhone service.
South Korea's domestic market was caught off guard by the introduction of the iPhone and Android phones, even though even though its large electronics companies were manufacturing the latter for export long before their introduction here. A full answer to the question of how and why the market here was caught off guard can shed a great deal of light on the strengths and weaknesses of South Korea's telecoms sector.